US President Donald Trump has announced to impose ‘Reciperocle Tax’ on Indian goods. Global brokerage firm City Research says that India’s Specialty Chemical Company may shock and reduce their profits. Currently, India has 10% tariff on organic and misleans chemicals, while its average in the US is only 3%. In addition, the average tariff on major exports to the US and Europe is 5–6%.
The CITI said that in such a situation, if the US imposes 7% tariff on these Indian exports, then the operating profit (Ebitda) of specialty chemical companies can decrease. Brokerage said it estimated 12 percent in PI Industries’ operating profit, 5 percent in new florine and 4 percent in SRF.
However, CITI also said that the actual effect of this tariff may be less than it. Brokerage gave some possible reasons behind it. City said that exporters from other countries may also have tariffs, which can provide partial relief to Indian companies. At the same time, tariffs are expected to increase prices in the US market, which can make up for the loss by increasing their prices.
At 9:30 am today, Pi Industries shares fell by 1.3 percent to trading at Rs 3,124. Naveen Florine’s stock fell 1 percent to Rs 4,045.8. At the same time, the SRF shares were trading at Rs 2,735.9 with a decline of 0.2 percent compared to their previous closed prices.
Can India get new markets?
On the other hand, brokerage firm Nuwama Institutive Equities believe that India can now consider the possibilities of increasing its presence in the European chemical market. However, this tariff is also creating opportunities for Europe’s chemical exports, especially for those who have an edge on the cost of cost. But there are some more problems in the Europe market. Europe’s chemical industry is currently facing problems such as a decline in domestic demand and additional production capacity of China.
Nuwama said, “This can promote India’s small-malaise pharmaceutical research industry, which is high in Europe. Also, India’s agrochemicals are also gaining momentum in Europe and European regulatory policy is now Indian Looks in favor of exporters. “
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